Life settlements are a new insurance and financial planning tool that allow individuals the opportunity to receive a lump sum cash settlement greater than the cash surrender value (CSV) of a life insurance policy they are planning to surrender due to lack of need or a change in financial circumstances.

The process involves a third party, preferably an independent financial institution, who upon appraising the life insurance policy and qualifying the insured will make an offer to purchase the policy from the owner. The benefit to the policy owner is that the offer will be substantially greater than what he or she would have received had they decided to let the policy lapse or surrender the policy for its current cash surrender value (CSV).

The funds can then be used for a variety of reasons including retirement planning, business planning, estate planning, and charitable giving. A strategy may even be chosen whereby additional coverage is acquired at a reduced cost for those desiring to have some life insurance in force while still getting cash out of their existing policy.

Reasons for considering settlements

• Settlement proceeds are substantially greater than cash surrender value
• Health and Long Term Care have created financial hardship.
• New Tax or Estate changes have made life insurance coverage excessive.
• Policy has become too expensive to maintain.
• Lapsing a policy provides no benefit.

Proceeds can be used to:

• Supplement retirement income.
• Eliminate premium expenses.
• Preserve a high quality of living.
• Do the things you’ve always wanted to do in life.
• Have “Peace of Mind.”

Case Study, A 75-year-old man owned a policy with a face value of $5 million and a cash surrender value of $302,000. He sold the policy for $1.4 million rather than taking the cash, letting it lapse, or cancelling it. Had he not sold the policy, he would have left at least $1.1 million on the table.

If you no longer desire to make premium payments and are considering surrendering your policy for its cash surrender value we urge you first to give us a call. A NWIA representative can assist you in exploring your options and obtaining the most competitive settlement offer. We want you to realize the greatest financial benefit to apply towards accomplishing your new financial and life goals.

Contact your NWIA advisor for a competitive Life Settlement offer.